NOTICE OF GROUNDS FOR OBJECTION
BY
Sirius XM Canada Inc.
TO SOCAN TARIFF 25 – SATELLITE RADIO SERVICES (2024-2026)
This Notice of Grounds for Objection is filed on behalf of Sirius XM Canada Inc. (the “Objector”) in response to the statement of proposed royalties to be collected by the Society of Composers, Authors and Music Publishers of Canada (SOCAN).The tariff in question is entitled “SOCAN Tariff 25, Satellite Radio Services (2024-2026)” and will be referred to in this Notice of Grounds for Objection as the “Tariff”.
Without admitting that it is liable for the payment of royalties pursuant to the Tariff, the Objector objects to the Tariff in its entirety.
The Objector offers satellite radio services. As the Tariff purports to target such services, the Objector has the necessary standing to object to the Tariff pursuant to the Copyright Act (the “Act”).
Some or all of the communications claimed by SOCAN do not trigger liability under the Act, inter alia because they:
(a)have already been authorized;
(b)are not “substantial” in the meaning of the Act;
(d)do not have a real and substantial connection to Canada.
For example, the Tariff contains no “fair dealing preview” provisions. In 2016, SOCAN asked the Copyright Board to certify an audiovisual tariff in which, “In the case of a single, initial free trial of no more than one month’s duration in any 12 month period offered to induce a prospective subscriber to enter into a paid subscription, there shall be no royalty fee payable”. SOCAN’s request gave minimal recognition to the s. 29 “fair dealing for the purpose of research” right reviewed by the Supreme Court in Society of Composers, Authors and Music Publishers of Canada v. Bell Canada, 2012 SCC 36. The Objector submits that in the circumstances, allowing a three-month trial period to be allocated over the course of a calendar year would represent a “win-win” for users and collectives. This trial period should be applicable both to new subscribers and “win-back” subscribers”. In the Objector’s experience, the three-month free trial period associated with its services has been the most effective time span for converting trial subscribers into paying subscribers for the long term.
The Objector denies that it engages in any acts of making available of copyright works in the meaning of s. 2.4(1.1) of the Act.
The Objector denies that SOCAN has legal entitlement to collect royalties for the uses covered by the Tariff, and puts SOCAN to the strict proof thereof.
In the alternative, any purported agreements relied on by SOCAN are void, unenforceable, and/or do not transfer sufficient rights to SOCAN.
In the further alternative, SOCAN does not have as large of a repertoire as it has claimed in past proceedings in respect of the activities covered by the Tariff.
The Objector denies that SOCAN filed its Tariff proposal by the date required under s. 68 of the Act. If filed out of time, a Tariff proposal is void. The Objector has reason to believe that SOCAN’s effective Tariff filing date was Monday, October 17, 2022. SOCAN’s Tariff proposal is therefore void and ineffective.
The Objector objects to the Tariff to the extent that it is duplicative of other tariffs that are applicable to the Objector. Activities (if any) that are found by the Copyright Board to be covered by another tariff for a given year cannot be re-claimed under the guise of a different tariff, as they would constitute “double-dipping” that violates the principles set out by the Supreme Court in Entertainment Software Association v. Society of Composers, Authors and Music Publishers of Canada, 2012 SCC 34 and Society of Composers, Authors and Music Publishers of Canada v. Entertainment Software Association, 2022 SCC 30 (“ESA I and ESA II”).
The Objector reserves its right to seek a consolidated proceeding establishing a single, user-based tariff specific to the satellite radio environment. Such consolidation would recognize the unique character and context of the Objector and help ensure that no double-dipping occurs via overlapping claims by collective societies including SOCAN. Such consolidation would also avoid inefficiencies for the Copyright Board, the relevant collectives and the Objector alike.
SOCAN’s proposed royalties and minima are neither fair nor equitable when applied to the Objector’s enterprise. In particular, the proposed ratesand minima do not reflect a fair, reasonableand appropriate value of SOCAN’s enforceable repertoire, and do not reflect the risks taken or investments made by the Objector. The proposed rates arealso excessive compared to rates charged in other jurisdictions for similar uses and do notreasonably reflect the amount, type or impact of music use by the Objector.
The administrative provisions set out in the Proposed Tariff are impractical and unduly onerous, do not track information in the forms held by the Objector, require the disclosure of sensitive confidential information, and place a disproportionate burden on the Objector.
SOCAN also creates punitive enforcement mechanisms in the Tariff despite the Board’s guidance that it will not certify terms and conditions that “touch[] on the area of liability and the provisions of the Act applicable to remedies against users governed by a tariff” (SOCAN Tariff 18 – Recorded Music for Dancing (2018-2022) at ¶43). These provisions cross the line into liability and remedies. They should be struck from any certified tariff.
The Objector reserves the right to vary or supplement the positions set out above at any stage of the within proceedings.
The Activities Do Not Trigger Copyright Liability
SOCAN Lacks the Necessary Rights to Collect Royalties under the Tariff
The Tariff Is Potentially Duplicative
The Royalties and Administrative Provisions Sought Are Neither Fair Nor Equitable, and Cross the Line into Remedies
Reservation of Rights
All of which is respectfully submitted this 16th day of January, 2023.
Daniel Glover
per: McCarthy Tétrault LLP
66 Wellington Street West,
Box 48, Suite 5300, TD Bank Tower
Toronto, Ontario, M5K 1E6
Telephone: (416) 601-8069
Facsimile: (416) 868-0673
E-mail: dglover@mccarthy.ca
Of Counsel to the Objector